Filipowicz v. Rothensies, No. 592.

CourtUnited States District Courts. 3th Circuit. United States District Courts. 3th Circuit. Western District of Pennsylvania
Writing for the CourtKALODNER
Citation31 F. Supp. 716
Decision Date16 February 1940
Docket NumberNo. 592.
PartiesFILIPOWICZ v. ROTHENSIES, Collector of Internal Revenue, et al.

31 F. Supp. 716

FILIPOWICZ
v.
ROTHENSIES, Collector of Internal Revenue, et al.

No. 592.

District Court, E. D. Pennsylvania.

February 16, 1940.


31 F. Supp. 717
COPYRIGHT MATERIAL OMITTED
31 F. Supp. 718
Kraus & Weyl and Jerome L. Markovitz, both of Philadelphia, Pa., for plaintiff

J. Cullen Ganey, U.S. Atty., Thomas J. Curtin, Asst. U. S. Atty., and Herman Toll, all of Philadelphia, Pa., for defendants.

KALODNER, District Judge.

Plaintiff filed a petition for a declaratory judgment, seeking adjudication by this court as to the title to certain dividends declared by a bankrupt estate.

The defendant Rothensies filed a motion to dismiss questioning (1) the jurisdiction of the court over the subject matter of the petition and (2) sufficiency of the petition.

The petition for the declaratory judgment discloses:

The plaintiff was in June, 1938, an employee of the defendants J. Michalowski and Charles Jasecki, and a member of the Amalgamated Clothing Workers of America, a labor union, hereinafter called the Union. (Pet. par. 1)

The defendants Michalowski and Jasecki (trading as United Coat Shop) were for some time prior to June, 1938, engaged to supervise various operations on garments owned by the manufacturers, Harry Steinberg and Louis Steinberg (trading as Steinberg Brothers), since declared bankrupt by this court in cause No. 20243. (Pet. par. 2)

For some time prior to June, 1938, Messrs. Steinberg failed to pay the defendants Michalowski and Jasecki for the operations on its garments. (Par. 2) The latter, in turn, failed to pay their employees' wages and became indebted for wages in the sum of $2,680.58, including the sum of $113.39 due the plaintiff. (Par. 2)

In June, 1938, the defendants Michalowski and Jasecki executed a writing with the Union by which the former assigned to the Union all their rights in any claim against the bankrupt estate of the Messrs. Steinberg, as trustee for all the unpaid wage-earners of defendants Michalowski and Jasecki. (Par. 3, Ex. 1)

On June 6, 1938, the defendant Herman Toll filed a proof of priority claim for wages as the assignee of such wages against the aforesaid bankrupt estate on behalf of the defendants Michalowski and Jasecki, as their attorney, which claim was allowed as a general claim. (Par. 4, Ex. 2)

The Union, as trustee for the plaintiff and other unpaid employees of the defendants Michalowski and Jasecki, filed a petition for leave to intervene in the bankruptcy proceedings on their behalf, to prove their claims against the bankrupt estate of Messrs. Steinberg, to protect the claims against that estate assigned as aforesaid. (Pars. 5, 6)

On or about March 23, 1939, three dividends were paid on the bankrupt estate of the Messrs. Steinberg, of which the defendant Toll received a total of $246.24 in three checks. While the defendant Toll retained the dividend checks, intending to transmit them to Kraus and Weyl (attorneys for the Union) "as the sum so retained belonged to the plaintiff and other wage-earners," he was served by defendant W. J. Rothensies, United States Collector of Internal Revenue, with a notice of lien, levy, and warrant for distraint because of the indebtedness of defendants Michalowski and Jasecki to the United States of America for taxes, penalties, and interest amounting to $1,059.94. (Pars. 8, 9)

Defendant Toll allegedly admits that the dividends belong to the Union as the plaintiff's trustee, but has not paid over the dividends because he is unable to decide to whom they should be paid. (Par. 10)

The petition alleges the possibility of the declaration of additional dividends in the future to be paid to defendant Toll. (Par. 11)

The plaintiff prays for a declaratory judgment adjudicating which party is legally entitled to the dividends already declared and those hereafter to be declared on the estate of the Messrs. Steinberg.

As to the defendant Rothensies first objection — that the court has no jurisdiction over the subject matter of the petition:

This objection is based on the premise that in the instant proceeding the plaintiff is seeking to enjoin the collection of a federal tax and that such a suit is prohibited by virtue of Section 3653 (a) of the Internal Revenue Code, 26 U.S.C.A. § 3653(a), which provides that: "Except as provided in sections 272 (a), 871 (a) and 1012 (a), no suit for the purpose of restraining the assessment or collection of any tax shall be maintained in any court."

Section 3653 (a) of the Code corresponds to Section 3224 of the Revised Statutes,

31 F. Supp. 719
26 U.S.C.A. § 1543, and decisions under the latter are binding precedents in the construction of the Code provisions

It may well be disputed whether the instant suit, in effect, is one for an injunction. However, for reasons noted infra, it is clear that Code Section 3653 (a) has no application to the instant case even had there been a suit brought expressly for the purpose of securing an injunction against seizure of the fund in question.

The leading case on the question in issue is that of Long v. Rasmussen, D. C., 1922, 281 F. 236, which involved a suit to enjoin a sale on a distraint warrant. Plaintiff claimed to be the true owner of the property which was in her possession when the distraint was levied. This was viewed by the court as establishing prima facie proof of her ownership which was not overcome by the evidence presented on behalf of defendant. In granting the injunction, the court declared: "Congress has no power to grant, and has not assumed to grant, authority to the defendant collector to distrain the property of one person to make the taxes of another. * * * The revenue laws are a code or system in regulation of tax assessment and collection. They relate to taxpayers, and not to nontaxpayers. The latter are without their scope. No procedure is prescribed for nontaxpayers, and no attempt is made to annul any of their rights and remedies in due course of law. With them Congress does not assume to deal, and they are neither of the subject nor of the object of the revenue laws. The instant suit is not to restrain assessment or collection of taxes of Wise, but is to enjoin trespass upon property of plaintiff, and against whom no assessment had been made, and of whom no collection is sought." Id., 281 F. at page 238.

In accord, see Lion Coal Co. v. Anderson, 10 Cir., 1932, 62 F.2d 325, 328; Trinacia Real Estate Co. v. Clark, D.C., 1929, 34 F.2d 325, 328; Owensboro Ditcher & Grader Co. v. Lucas, D.C., 1927, 18 F.2d 798, 802.

Compare Cannon v. Nicholas, 10 Cir., 1935, 80 F.2d 934, in which W defended against a levy on a policy of life insurance for H's taxes, on the ground that she was an owner thereof. Upon an examination of the state law applicable, the court found that W did have a beneficial interest in the policy involved. Therefore, the court concluded (80 F.2d at page 939): "The effort to sell the entire policy, including Mrs. Cannon's interest therein as recognized by the Colorado law, should be enjoined."

Sawhill v. Lawrence, 3 Cir., 1934, 69 F. 2d 194, involved a petition for an injunction to restrain the tax collector from selling property seized on distraint. Testimony was heard by the trial court on the issue of an assignment of the property by the taxpayer prior to the establishment of the tax lien. In upholding the trial court's decree denying the injunction sought, the Circuit Court declared (69 F. 2d at page 195):

"In view of the dispute as to the real ownership of the pipe at the time of the lien, it was for the trial court to determine the facts. That court disbelieved the testimony * * * as to the alleged assignment to Mrs. Small, and we think the record justified its conclusion that there was insufficient credible testimony to establish the passage of title from Small prior to the lien. * * *

"The receivers' claim for injunction is enforceable only upon proof that ownership was no longer in Small on December 10, 1932, the date of the filing of notice of the lien for taxes. The trial court found the evidence on this issue insufficient to persuade it to grant the injunction. Upon a careful examination of the record, we discover no error in its findings of fact or conclusions of law."

In Hubbard Investment Co. v. Brast, 4 Cir., 1932, 59 F.2d 709, 710 the court declared: "If therefore, this were a case where property equitably belonging...

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7 practice notes
  • Southern Ry. Co. v. South Carolina Public Serv. Com'n
    • United States
    • United States District Courts. 4th Circuit. United States District Court of South Carolina
    • February 26, 1940
    ...with the burden on interstate commerce resulting from state requirements of service by authorizing the abandonment of all service on 31 F. Supp. 716 any line or part of a line, where the Interstate Commerce Commission after giving consideration to the public interest so determines. On the p......
  • Bullock v. Latham, No. 284
    • United States
    • United States Courts of Appeals. United States Court of Appeals (2nd Circuit)
    • July 20, 1962
    ...property taken as security for taxes owed by another; jurisdiction upheld under 28 U.S.C. § 2463); Filipowicz v. Rothensies, D.C.Pa.1940, 31 F.Supp. 716 (Action for declaratory judgment against Collector of Internal Revenue, et al. Jurisdiction under Declaratory Judgments Act Nothing said i......
  • Bensinger v. Davidson, No. 17179.
    • United States
    • United States District Courts. 9th Circuit. United States District Court (Southern District of California)
    • December 18, 1956
    ...only a legal title as security. In substance it is in the position of a mortgagee * * *". 2 See: Filipowicz v. Rothensies, D.C.Pa. 1940, 31 F.Supp. 716, 3 Throughout the cases, there runs discussion of certain of the following sections: § 3275 Cal.Civil Code (Relief in case of forfeiture, "......
  • Stuart v. Chinese Chamber of Commerce of Phoenix, No. 11771.
    • United States
    • United States Courts of Appeals. United States Court of Appeals (9th Circuit)
    • June 15, 1948
    ...v. Jones, D.C., 64 F. Supp. 389, 391; New York Casualty Co. v. Zwerner, D.C., 58 F.Supp. 473, 477; Filipowicz v. Rothensies, D.C., 31 F. Supp. 716, 719. See also National Iron Bank v. Manning, D.C., 76 F.Supp. 841, 3 Cf. Glenn v. American Surety Co., 6 Cir., 160 F.2d 977, 981; Rothensies v.......
  • Request a trial to view additional results
6 cases
  • Southern Ry. Co. v. South Carolina Public Serv. Com'n
    • United States
    • United States District Courts. 4th Circuit. United States District Court of South Carolina
    • February 26, 1940
    ...with the burden on interstate commerce resulting from state requirements of service by authorizing the abandonment of all service on 31 F. Supp. 716 any line or part of a line, where the Interstate Commerce Commission after giving consideration to the public interest so determines. On the p......
  • Bullock v. Latham, No. 284
    • United States
    • United States Courts of Appeals. United States Court of Appeals (2nd Circuit)
    • July 20, 1962
    ...property taken as security for taxes owed by another; jurisdiction upheld under 28 U.S.C. § 2463); Filipowicz v. Rothensies, D.C.Pa.1940, 31 F.Supp. 716 (Action for declaratory judgment against Collector of Internal Revenue, et al. Jurisdiction under Declaratory Judgments Act Nothing said i......
  • Bensinger v. Davidson, No. 17179.
    • United States
    • United States District Courts. 9th Circuit. United States District Court (Southern District of California)
    • December 18, 1956
    ...only a legal title as security. In substance it is in the position of a mortgagee * * *". 2 See: Filipowicz v. Rothensies, D.C.Pa. 1940, 31 F.Supp. 716, 3 Throughout the cases, there runs discussion of certain of the following sections: § 3275 Cal.Civil Code (Relief in case of forfeiture, "......
  • Stuart v. Chinese Chamber of Commerce of Phoenix, No. 11771.
    • United States
    • United States Courts of Appeals. United States Court of Appeals (9th Circuit)
    • June 15, 1948
    ...v. Jones, D.C., 64 F. Supp. 389, 391; New York Casualty Co. v. Zwerner, D.C., 58 F.Supp. 473, 477; Filipowicz v. Rothensies, D.C., 31 F. Supp. 716, 719. See also National Iron Bank v. Manning, D.C., 76 F.Supp. 841, 3 Cf. Glenn v. American Surety Co., 6 Cir., 160 F.2d 977, 981; Rothensies v.......
  • Request a trial to view additional results

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